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Engineers face the future

An engineering forum hosted by WA Business News has revealed a profession facing unprecedented pressures. Mark Beyer reports.

 

THE buoyant growth in investment spending in Western Australia has put engineers centre stage in the State’s economic performance.

Engineering groups are as busy as they have ever been, but many people in the profession see cause for concern.

They believe governments, State and Federal, could do a lot more and they are also concerned about the growing shortage of engineers.

The increasing tendency to put low prices ahead of quality was another issue raised by participants in WA Business News’ engineering forum, organised jointly with the Association of Consulting Engineers Australia (WA division).

The forum participants said WA was experiencing an acute shortage of qualified engineers.

“Every area of the industry is short,” GHD managing director Ian Shepherd said.

“Even the contractors are out trying to find staff.”

Connell Wagner managing director Charles Milazzo said his firm was advertising in South Africa and the UK to try and attract suitable staff.

“I think everyone in this room would be lying if they didn’t admit they would like to hire more staff,” he said.

One of the challenges facing the industry is the boom-bust cycle, which makes it hard to plan ahead.

“I remember four years ago, going to Karratha and finding that a lot of the contractors had moved to Perth but their site establishments, their dongas, were still there waiting for the next boom, and I think that boom has arrived,” Worlesbury managing director Robert Lowe told the forum.

Big resource projects such as Woodside’s $2.4 billion Train Four expansion, Newcrest’s $1.2 billion Telfer gold project, the $630 million Burrup Ferilisers project and the expansion of the iron ore industry have all played a big part in lifting demand for engineers.

“What we are seeing is that China is having a very big influence on what’s happening in the North West in oil and gas and iron ore,” Mr Milazzo said.

“Both BHP Billiton and Hamersely Iron are going to capitalise on that.

“They both have large expansion programs right now that will come to fruition in the next two to four years.”

Further big projects are on the way, such as Alcoa’s $440 million upgrade of its Pinjarra alumina refinery.

Work is due to commence next month and will create a peak of 1,000 jobs during construction.

These big projects are additional to many other areas of activity, including government infrastructure projects, medium density residential developments, hospital projects, shopping centre expansions and redevelopment, the Woodside office building and a number of smaller office buildings.

Some participants in the forum felt that governments could do more to encourage flow-on benefits from the big resource projects.

Austconsult managing director John Foster said policies in Australia compared unfavourably with those in the UK.

One problem had been governments “moving the goal posts”, much to the dismay of foreign companies.

“On one occasion, I was in London with the chairman of Taylor Woodrow,” Mr Foster said. “They said, if you are in Australia, cut your losses and get out, and if you are thinking of going to Australia, don’t go.”

Mr Shepherd had a more sanguine view.

“The State Government, and even the Federal Government, do support a lot of activities in WA.

“You look at Kingsteam, AusIron, and Methanex; governments have committed lumps of money to them, but the projects themselves don’t get up, they can’t reach financial close, and they collapse.”

Mr Shepherd said other examples included government support for the Australian Marine Complex at Jervoise Bay and for the woodchip mill and export facilities at Albany.

While the current outlook is undoubtedly buoyant, some participants in the engineering forum sounded notes of caution.

“Whilst at the moment future predictions look pretty good, what we are talking about is quite fragile,” Wood & Grieve director Matt Davis said.

“If a couple of the big resource projects don’t happen, all of a sudden it doesn’t look so good.”

SKM senior associate Gil Alexander said the rising value of the Australian dollar was a major concern.

“Although everything looks rosy, there is an underlying cost factor which has to be addressed,” he said.

“I think this is an issue the pollies have to start looking at, because exports have been hurt.”

Participants in the forum said the rising dollar highlighted the increasing globalisation of the engineering profession.

“One of the trends is that a lot of the documentation for infrastructure projects is being done in developing countries, specifically India,” Mr Lowe said.

“Indonesia is another source. I would expect that trend will continue.”

Mr Alexander said his firm was already operating on a global basis.

He cited a rail project in Dublin, which was project managed in Melbourne while the drafting and documentation was done in South-East Asia.

“That’s the only way we can be competitive. We’re a global organisation so we have to look at that.”

 

“I think everyone in this room would be lying if they didn’t admit they would like to hire more staff.”

-         Charles Milazzo

 

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